Silver climbed substantially higher this week, finally, after somewhat lagging the upward movement that gold has seen beginning in June. The silver mining stocks followed it upward and broke out of previous trading ranges.
This shiny white metal had been lagging gold which took off early in June. Typically, the 2 move together — more or less — and so, from a technical analysis perspective, this week’s silver blast tends to confirm the positive action already seen in the yellow metal.
Here’s a look at the daily price chart for silver:
The metal ETF moved back up to its previous 2019 high on remarkably strong volume. It’s powerful enough that the downward trajectory of the Ichimoku cloud has now reversed. A close above the February peak of 15.20 might be significant if achieved.
Here’s silver’s weekly price chart:
The price broke above the downtrend line that connects the 2016 peak of 19.75 with the early 2019 peak of 15.20. On this time frame, you can clearly make out the power of the upward move — that’s quite a candlestick. That silver made a close above the Ichimoku cloud on a weekly basis is probably significant.
Viewed on a long-term time frame, you can see that silver remains well above the 2008 low 8 and well below the 2011 peak of just under 50. This week’s move is relatively small when you look at from this perspective. A close or 2 above the Ichimoku cloud would suggest a trend reversal on the monthly chart.
The most widely traded silver stocks are blasting higher with this move in the underlying metal.
Here’s the weekly price chart for New York Stock Exchange-traded First Majestic Silver Corp:
It’s hard to miss the break above the downtrend line that connects the high price of 19 back in 2016 with the early 2019 previous peak of 7. The current 9.70 is well above the Ichimoku cloud. Also, note the classic rounding bottom formation from 2018 into earlier this year.
Here’s the weekly price chart for NASDAQ-traded Pan American Silver:
This week’s move upward takes the price above the downtrend line in place since the mid-2018 highs. Pan American has yet to close above the Ichimoku cloud. The ultimate challenge will be the old highs up near 21 from 2016 and 2017.
That both precious metals seem to be in sync is the main point here. I’d guess that it’s the usual combination of 1) inflation that might be on the way with the much lower interest rates and 2) basic fear of global investment dynamics, including the growing sense that America’s White House occupant may be a problem.
I do not hold positions in these investments. No recommendations are made one way or the other. If you’re an investor, you’d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.